What is a condominium?

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For some house hunters, the thought of maintaining a house and a yard conjures up anxiety. Luckily, there are different kinds of properties to choose from that don’t entail a lot of upkeep — and come at a reasonable price to boot. One of those options is a condominium.

What is a condo? Should you buy one? How to buy a condo? Here’s a primer on condo living to help you decide if it’s right for your lifestyle.

What is a condominium?

A condominium, called “condo” for short, is a privately-owned individual unit within a community of other units. Condo owners jointly own shared common areas, such as pools, garages, elevators and outside hallways and gyms, to name a few. While condos are usually found in high-rise buildings, you can find detached condos in some markets.

A homeowners association typically manages the common areas and oversees the covenants, conditions, and restrictions (CC&Rs) that apply to the property. Condominiums are often referred to as a ‘common interest development.

Why buy a condominium?

For many buyers, the answer to this question is simplicity. With most condo developments, you only have to take care of the interior. All the rest is handled by a professional management company. There’s no lawn to cut, flowerbeds to maintain or driveways to be cleared of snow.

Another important piece is the price tag. Condos have historically been more affordable than single-family homes, and that trend continues today. In fact, condos appreciated at a slower pace than that of single-family homes in 2020, according to Black Knight data, and sold for approximately 17 percent less, representing a savings of around $58,000, real estate brokerage Redfin reports.

Condos are often cheaper in terms of taxes, too: A smaller space means a smaller bill from the county.

There’s also a community life that single-family homes often don’t provide, including shared spaces and amenities, events and more. It’s a lot easier to take off and pursue travel or live seasonally in another area with the peace of mind of knowing that once you lock the door, everything will be taken care of.

Factors to consider before you buy a condo

What is the difference between an apartment and a condo?

Structurally, condos and apartments can look the same, but the key difference between a condo and an apartment is ownership: You own a condo, and you rent an apartment. (In some limited markets like Downtown Houston, however, you can buy an apartment.)

Both kinds of dwellings typically have multiple floors and units on each with shared amenities and common areas, such as a gym, pool and parking. In some communities, condo owners can rent their units to tenants, too.

What is the difference between a condo and a house?

If you live in a condo, it’s your home, but it’s not a house. That’s an important distinction, particularly when it comes to maintenance.

Consider if you owned a detached single-family house and the roof needs to be repaired. As a homeowner, that expense would fall entirely on your shoulders. If you owned a condo, that cost would likely be split between other owners in the community, and a portion of it might also be paid for via the reserves of the homeowners association.

Sharing expenses can be helpful, but it’s important to note that condo owners often must follow additional rules and community restrictions. For example, there could be aesthetic requirements to adhere to, such as a mandate to install the same windows as every other unit. Simply put, you might not have complete control over the decisions about your condo, whereas with a house, you’ll have much more latitude.

Should I rent or own a condo?

Your finances will be the main deciding factor that answers this question. As with any home type, when you buy a home, you’ll need a large sum of money for a down payment, as well as closing costs.

Renting a condo can also be a good opportunity to test out a particular building or area of town before making a long-term ownership commitment.

[Renting allows an] individual to experience living in a condo to see if the ‘condo life’ is something they want to invest in.

Pros and cons of living in a condo

If you’re thinking of buying a condo, it’s important to weigh the benefits and challenges so your decision suits your lifestyle and budget. Here are some top things to consider.

Pros of living in a condominium

  • Lower-maintenance living: Since most, if not all, exterior maintenance on condos is handled by the HOA, condos are best for buyers who don’t want the higher maintenance (responsibility) of owning their own house, such as mowing their lawn, fixing a leaky roof, etc.
  • Sense of security: Some condo communities have security staff, and the entrances are more difficult to access from the outside than single-family homes or townhomes. Many single people do not like living alone, and condo living makes them feel safer. Depending on the building, you might have secure entrances and parking, a doorman or concierge and other amenities that increase security and safety. This can also be a perk if you work odd hours or travel frequently.
  • Opportunities to be social: Some HOAs organize social events like pool parties, barbecues and doggy playdates. In addition, because you see your neighbors in passing, you’re more likely than not to meet them in person. Condos are a great place to meet people since you are close to your neighbors, and this can provide a great sense of community.
  • Affordability: Because condos tend to be more compact and require less land than single-family homes, they can be a more affordable way to own property. Property taxes tend to be lower as well. For some first-time buyers, condos make ideal starter homes precisely because they don’t have the upkeep and maintenance of a detached home, but you can still reap the benefits of ownership and building equity.
  • Amenities: Depending on the condo community, you may have access to top-notch amenities like a grilling area, business center, pool, dog park, covered parking, clubhouse and more, and the cost of enjoying these perks is shared among all residents.

Cons of living in a condominium

  • HOA rules: One of the biggest complaints about living in a condo community is that HOA rules can be restrictive, providing guidance on everything from trash pickup and noise to what types of items may be stored on your patio and how many pets you can have. [Read] the covenants and bylaws before buying a condo to make sure the rules won’t be a problem for you and your lifestyle, since breaking HOA rules can lead to fines.
  • Investment risk: Condos can be a riskier investment because you are sharing ownership with other people in the building. If one person forecloses or short-sells their condo, it can take a toll on your value since you’re in the same complex.
  • Lack of privacy: Because condos share common areas like the lobby, hallways, outdoor patios and amenities, a condo might not be for you if you value your privacy. The shared space also comes with noise issues. For example, if your upstairs neighbor wakes up early for work, those footsteps might drag you out of bed, too. If you want more seclusion or you entertain frequently, for example, a townhouse might be a better option.
  • Limited outdoor space: Condos usually maximize real estate by building up, which often means there is limited outdoor or green space. If you’re the kind of person who needs to park work vehicles at home or needs a lot of outdoor space for your work or pleasure, a condo may not be for you.
  • Rising HOA fees: HOA fees generally go up over time to address maintenance costs and any added amenities. It’s important to factor the cost of HOA fees into your homebuying budget, especially in more expensive housing markets. Keep in mind, too, that condo associations can enact special assessments on all homeowners for unexpected expenses or even new amenities.
  • Restrictive rental policies: When you buy into a shared building, you commit to following the rules, which can prohibit how many units can be rented at any given time. Many condominiums don’t allow owners to rent their units after they purchase, so if you’re buying for an investment property make sure and check the rental regulations.

Find other housing types:

  • Condominium –  Condos appeal to those looking for a lower-maintenance living, home with a sense of security, opportunities to be social with neighbors, among other factors
  • Townhouse – Townhouses are a particularly good option for first-time homebuyers or other budget-minded home buyers who want more space than typically afforded in a condo
  • Single Family Home – Single-family homes are best for families who prefer a huge yard and plenty of room to spread out. Others still prefer a low-maintenance condo or townhome that includes benefits like landscaping, snow removal and exterior maintenance.
  • Multi Family Home – Multi-family homes are best for those who are interested in getting into real estate investing and are comfortable with the added responsibility and time commitment that comes with being a landlord.
  • Patio Home –  Typically capped at one-and-a-half stories and part of a larger association, patio homes are best for homeowners who don’t want to deal with stairs or maintenance.
  • Waterfront Home – Waterfront means the area of water which is immediately capable of use from the land, together with the area of land adjacent to the water, which is necessary to allow use of the above area of water

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